NARUC Telecom Committee Approves High-Cost Funding, BDAC Resolutions

SAN DIEGO – The National Association of Regulatory Utility Commissioners’ Committee on Telecommunications today passed a draft resolution calling for sufficient funding of the high-cost universal service program, and another draft resolution urging the FCC to increase the number of state and local entities represented on its Broadband Deployment Advisory Committee (BDAC). The first proposed resolution, sponsored by a group of commissioners including South Dakota Public Utilities Commissioner Chris Nelson, Nebraska Public Service Commissioner Crystal Rhoades, and Missouri Commissioner Maida Coleman, calls on the FCC to take the necessary steps to address the “lack of sufficient USF resources on availability and affordability of voice and broadband services in rural America.”

“We’re all trying to get broadband in places that don’t have it,” Commissioner Nelson said during today’s meeting. “The FCC has been working on this, but they haven’t completed the puzzle. This resolution is one more piece in that particular puzzle.” He added, “This resolution is asking the FCC, ‘Hey, finish the job that you started.’ It’s really that simple.”

The resolution points to a shortage of broadband funding for rate-of-return regulated local exchange carriers, and notes that demand for Alternative Connect America Cost Model (A-CAM) support exceeded supply by $110 million per year, “resulting in the FCC reducing A-CAM support for all electing RLECs, which translates to deployment of lower speeds and fewer locations being connected.” And since the FCC didn’t provide additional funding for those RLECs that didn’t elect A-CAM support, a group of carriers are being subjected to a budget control resulting in about the same collective level of support that they received in 2010.

RLECs are facing increasing investments under buildout obligations, and the “non-model USF budget control is translating to higher prices for rural consumers, as RLECs denied USF support due to this budget control for recovery of actual costs for investments already made must turn to their consumers for such recovery. According to the resolution, “higher prices as a result of the budget control are in direct conflict with the repeated bipartisan calls by hundreds of members of Congress in 2014, 2015, and 2017 for the FCC to make targeted reforms to the USF mechanisms to enable lower prices for standalone broadband that are ‘reasonably comparable’ to those available in urban areas.”

The draft resolution, therefore, “joins the most recent bipartisan calls by 57 members of the United States Senate and 102 members of the United States House of Representatives expressing concern that ‘the lack of sufficient resources in the reformed High-Cost mechanism may be undermining the desired effect of the [FCC’s] reforms and falling short of the statutory mandate that reasonably comparable services at reasonably comparable rates be available to rural and urban Americans alike,'” and urges the FCC to “take those steps necessary to address the effects of this lack of sufficient USF resources on availability and affordability of voice and broadband services in rural America.”

The second draft resolution approved by the committee today is sponsored by New York Public Service Commissioner Gregg Sayre and New Jersey Board of Public Utilities Commissioner Upendra Chivukula. It calls on the FCC to increase state and local representation on the BDAC.

Commissioner Sayre said that the intent of the BDAC tracks section 706, which urges both the FCC and the state regulatory commissions to take steps to promote broadband deployment. The problem is that there is only one member representing states on the BDAC, he said. “So if we’re going to follow the section 706 mandate, we need more representation.”

“This is an appropriate time to increase the number of state and local representation on the BDAC to equal the number of industry representatives,” Commissioner Sayre said during today’s committee meeting.

The draft resolution specifically urges the FCC to “work together with the States and local governments to identify existing barriers and to develop best practices for granting access at all levels to improve broadband deployment and to effectuate this objective by increasing the number of State and local government entities on the Broadband Deployment Advisory Committee to an amount that balances with representation by industry representatives.”

FCC Chairman Ajit Pai formed the BDAC earlier this year to develop recommendations for actions the FCC can take to encourage broadband deployment across the U.S. (01/31/17). Issues such as local franchising, zoning, permitting, and rights-of-ways regulations are expected to be considered by the new committee.

The draft resolution notes that Chairman Pai has appointed 30 members of the BDAC, including 21 members that represent various industries or industry associations, while only two members represent state agencies, two members represent city governments, and one member represents a tribal government.

The draft resolution also notes that the composition of the advisory committee “will necessarily impact its recommendations,” and that it is “likely that the BDAC could provide better and more balanced recommendations if an increased number of State and local government entities are represented.”

These resolutions will not become final NARUC policy until they are approved by the board of directors, which meets tomorrow afternoon. -Carrie DeLeon, carrie.deleon@wolterskluwer.com